Outlook and Recommendation The USD/JPY will open March at 112.94 seeing a dip of close to 7% for the month as the yen rallied most of the month on safe
The USD/JPY will open March at 112.94 seeing a dip of close to 7% for the month as the yen rallied most of the month on safe haven trades. The JPY fell at the end of the month as improved investment sentiment triggered fund outflows as Japan’s core inflation stayed unchanged in January, compared with the previous figure of 0.1%. Outlook analysis: The BoJ may cut the interest rate from -0.1% to -0.3% in July as core inflation may become negative for the coming months on weak energy prices and a rebound in JPY. However, the measures may have limited impact on liquidity, which may limit JPY downside.
After finding a seeming floor at zero, headline CPI is near 0.3 percent. Excluding fresh food, the traditional core measurement in Japan, CPI shows slight deflation. However, Japanese officials seem to be giving more credence to measures of inflation that exclude energy as well. Core CPI excluding fresh food and energy sits closer to 1.0.
Traditionally, Japan core CPI is calculated as all items less fresh foods. Japan’s calculation differs drastically from other nations as they leave energy included in their core CPI rating. If the US were to include energy in its core CPI measurement, we could expect a materially lower print driven by sharply declining energy components across the board – projected at less than 0.5 percent. The heavier weight in food would not impact the number as drastically, with the food component posting a year-over year increase close to the 1.9 percent core inflation figure.
FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports and we provide daily updates and outlooks.
Upcoming Economic Events that you should be monitoring:
March 1, 2016
CNY | Manufacturing PMI | |||||||||
CNY | Caixin Manufacturing PMI | |||||||||
AUD | Interest Rate Decision | |||||||||
AUD | RBA Rate Statement | |||||||||
EUR | German Manufacturing PMI | |||||||||
EUR | German Unemployment | |||||||||
GBP | Manufacturing PMI (Feb) | |||||||||
CAD | GDP (MoM) (Dec) | |||||||||
USD | ISM Manufacturing PMI (Feb) | |||||||||
March 2, 2016 | ||||||||||
AUD | GDP (QoQ) (Q4) | |||||||||
GBP | Construction PMI (Feb) | |||||||||
USD | ADP Nonfarm Employment | |||||||||
USD | Crude Oil Inventories | |||||||||
March 3, 2016 | ||||||||||
GBP | Services PMI (Feb) | |||||||||
USD | ISM Non-Manufacturing | |||||||||
March 4, 2016 | ||||||||||
AUD | Retail Sales (MoM) (Jan) | |||||||||
USD | Nonfarm Payrolls (Feb) | |||||||||
USD | Unemployment Rate (Feb) | |||||||||
CAD | Ivey PMI (Feb) | |||||||||
March 8, 2016 | ||||||||||
JPY | GDP (QoQ) (Q4) | |||||||||
CNY | Trade Balance (USD) (Feb) | |||||||||
March 9, 2016 | ||||||||||
GBP | Manufacturing Production | |||||||||
CAD | Interest Rate Decision | |||||||||
March 10, 2016 | ||||||||||
NZD | Interest Rate Decision | |||||||||
CNY | CPI (YoY) (Feb) | |||||||||
EUR | Interest Rate Decision (Mar) | |||||||||
March 11, 2016 | ||||||||||
CAD | Employment Change (Feb) | |||||||||
March 12, 2016 | ||||||||||
CNY | Industrial Production (YoY) (Jan) | |||||||||
March 14, 2016 | ||||||||||
NZD | GDP (QoQ) (Q4) | |||||||||
March 16, 2016 | ||||||||||
GBP | Average Earnings Index | |||||||||
GBP | Claimant Count Change (Feb) | |||||||||
March 17, 2016 | ||||||||||
NZD | GDP (QoQ) (Q4) | |||||||||
AUD | Employment Change (Feb) | |||||||||
EUR | CPI (YoY) (Feb) | |||||||||
GBP | Interest Rate Decision (Mar) | |||||||||
March 18, 2016 | ||||||||||
CAD | Core CPI (MoM) (Feb) | |||||||||
CAD | Core Retail Sales (MoM) | |||||||||
March 21, 2016 | ||||||||||
Japan – Spring Equinox Day | ||||||||||